Saudi Arabia Bringing US Cheaper Oil......

The price of gas is plummeting and we have Saudi Arabia to thank for it. Make sure you send them a thank you note.

There is a war going on in the Oil industry. It is the old guard (Opec) VS the new guard (USA’s drill baby drill, and the Canadian Oil sands).
All the drill baby drilling America has done is clobbered Opecs dominance. But Opec has a silver bullet.

See producing oil in Saudi Arabia is significantly cheaper than producing it through Fracking (in the United States). Likewise the oil sands have a very high productions cost.

When a barrel of oil sells for $100.00, it enables Fracking (and Oil sands) to be done. Financially it makes sense. But if Oil is $70.00 a barrel suddenly it is a lot less profitable. The lower the price the harder it is to produce through fracking.

If the price remains low it will mean US oil wells will be shut down. Exploration will be halted. Saudi Arabia is well aware and flooding the US market to help the cause.

In the short run Opec countries will also take a hit. In the long run (if US production is halted) they will once again be top dog. Better to be top dog at $50.00 a barrel (and have no competition) then make $100.00 a barrel and compete with US production.

That is the move, and we are all the beneficiaries.

It is Ironic because we were told if we want cheap oil we need to rid ourselves of Mideast oil. Today the reality is we are getting cheaper oil because of the Mideast.

http://www.marketwatch.com/story/oil-slides-on-speculation-about-saudis-pricing-strategy-2014-11-04-310308